(Determine Cash Balance)
Presented below are a number of independent situations.
For each individual situation, determine the amount that should be reported as cash.
1.Checking account balance $925,000; certificate of deposit $1,400,000; cash advance to subsidiary of $980,000; utility deposit paid to gas company $180.
Cash balance of $925,000. Only the checking account balance should be reported as cash. The certificates of deposit should be reported as a temporary investment, the cash advance to subsidiary should be reported as accounts receivable, and the utility deposit should be identified as a receivable from the gas company.
2.Checking account balance $600,000; an overdraft in special…show more content…
1. Beginning-of-the-year Accounts Receivable balance was $15,000.
2. Net sales (all on account) for the year were $100,000. Jones does not offer cash discounts.
3. Collections on accounts receivable during the year were $70,000.
(a) Prepare (summary) journal entries to record the items noted above.
Accounts Receivable $100,000 Sales $100,000
Cash $70,000 Accounts Receivable $70,000
(b) Compute Jones' accounts receivable turnover ratio for the year. The company does not believe it will have any bad debts. (Round answer to 2 decimal places.)
Accounts Receivable Turnover = Sales / Average Receivables
Beginning Accounts Receivable = $15,000
Add: Sales $100,000
Total Receivables $115,000
Less: Cash Receipts $70,000